U.S. Stocks Fluctuate on Retail Sales, Consumer Price Reports
Aug. 13 (Bloomberg) -- Keith Wirtz, chief investment officer at Fifth Third Asset Management Inc., talks about the outlook for the U.S. equity market. Wirtz speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
U.S. stocks swung between gains and losses, a day after the Standard & Poor’s 500 Index fell to its lowest level since July 21, after consumer confidence beat estimates while a gauge of retail sales unexpectedly decreased.
Nordstrom Inc. declined 5.9 percent after saying expenses increased in the second quarter. Eli Lilly & Co. retreated 2.8 percent after losing patent protection on a product. Autodesk Inc. jumped 6.9 percent after second-quarter results beat analyst estimates, while Hewlett-Packard Co. and Bank of America Corp. rose at least 0.8 percent to lead gains in the Dow Jones Industrial Average.
The S&P 500 fell 0.1 percent to 1,082.08 as of 11:11 a.m. in New York. The Dow Jones Industrial Average declined 10.10 points, or 0.1 percent, to 10,309.85. About two stocks retreated for each that advanced on U.S. exchanges.
“We in the market are coming to the realization, and we’re getting confirmation from the economic data, that we are having a slowdown,” said James Thorne, who oversees $2 billion as chief investment officer for equities at MTB Investment Advisors in Baltimore. “The market is guilty until proven innocent, and the charge is a double-dip recession.”
U.S. stocks fell yesterday, sending the S&P 500 to the biggest three-day decline since July 1, after an unexpected increase in unemployment claims added to evidence the economy is weakening. The gauge retreated 3.4 percent this week through yesterday as the Federal Reserve said the pace of recovery will probably be “more modest” than forecast.
Retail Sales
The S&P 500 rebounded from a drop of as much as 0.3 percent after the Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 69.6 following a reading of 67.8 in July that was the lowest since November. The gauge was forecast to rise to 69, according to the median of 65 economists in a Bloomberg News survey.
Before U.S. exchanges opened, a report from the Commerce Department showed sales at U.S. retailers rose less than forecast in July, indicating the lack of jobs is prompting Americans to rein in spending. Purchases increased 0.4 percent, led by autos and gasoline. Excluding auto dealers and service stations, demand dropped 0.1 percent.
Equity index futures still recovered from session lows as a Labor Department report released at the same time showed consumer prices rose for the first time in four months in July, easing concern slow growth will cause deflation. The 0.3 percent increase in consumer prices exceeded the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News. A gauge excluding volatile food and fuel costs, the so-called core rate, increased 0.1 percent, as projected.
Nordstrom, Eli Lilly
Nordstrom, the operator of more than 100 namesake department stores, fell 5.9 percent to $31.46 for the biggest drop in the S&P 500.
Eli Lilly fell 2.4 percent to $35.73. Strattera, the drugmaker’s treatment for attention-deficit disorder, faces generic competition after a U.S. court invalidated a patent on the medicine.
Autodesk rose 6.9 percent to $29.33 for the biggest advance in the S&P 500. The maker of software used in bridge design and the special effects in movies posted second-quarter profit excluding some items of 36 cents a share, beating the average analyst estimate by 32 percent, according to Bloomberg data.
Dynegy Inc., Allis-Chalmers Energy Inc. and Unica Corp. surged after agreeing to takeovers.
Dynegy, RRI Energy
Dynegy, the U.S. power producer that lost more than 90 percent of its market value in the past three years, will be acquired by an affiliate of Blackstone Group LP. The shares rose 59 percent to $4.42, sparking gains in other power companies.
RRI Energy Inc. climbed 9.2 percent to $3.68 for the biggest gain in the Russell 1000 Index. Mirant Corp. jumped 7.6 percent to $10.25. Calpine Corp. added 6.2 percent to $13.29.
Allis-Chalmers Energy Inc. surged 55 percent to $3.56. The oilfield-services provider said it will be acquired by Seawell Ltd. of Bermuda for $307.8 million, or $4.25 a share, 85 percent more than yesterday’s close.
Unica more than doubled to $20.78. The Waltham, Massachusetts-based provider of software products will be acquired by International Business Machines Corp. for about $480 million, or $21 a share in cash.
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